Dow, S&P Reach Record Highs; Bomb Plot Was For July 4; Wildfires in California Threaten Homes; American Sentenced to 15 Years Hard Labor in North Korea

Aired May 3, 2013 - 12:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JAKE TAPPER, CNN ANCHOR: Hello, I'm Jake Tapper in Washington, D.C.

We'll begin with a huge rally on Wall Street. Both the Dow and the S&P 500 reached record highs today. The surge in the market follows a better than expected jobs report for April. The Labor Department said today that the economy added 165,000 jobs last month. Economists were expecting about 140,000. The unemployment rate dipped from 7 - to 7.5 percent from 7.6 percent.

Alison Kosik is at the New York Stock Exchange and Diane Swonk joins us from New York. She is chief economist at Mesirow Financial.

Alison, first, give us an update on the numbers and a sense of the mood among investors right now.

ALISON KOSIK, CNN CORRESPONDENT: Well, we continue to see the major averages, Jake, making history, although we're seeing those historic levels being actually pulled back just a little each time that we do see these levels, though they are reaching those historic highs. The Dow, right now, at 14,985. The S&P 500 at 1,615. As I said, still making history. Investors here at the New York Stock Exchange are elated, downright giddy on the floor. And this is because of that positive jobs report. If you look at how the year's been going so far, what a year so far for stocks. The Dow's up 14 percent. The S&P 500 is up 13 percent. The Nasdaq is up 12 percent.

But one trader that I talked to said, wait a minute, when these markets keep going up and up, it makes me downright nervous, going on to say greed prevents you from selling, but it's hard to find something to buy. Meaning it's hard to find long term value because it's tough to find a cheap stock. It's hard to find a bargain out there when you see levels like this.

Jake.

TAPPER: Alison, the bigger story on jobs today might be that the numbers for February and march were revised upward. They were higher than we thought at the time. What do these revised numbers how?

KOSIK: OK, well the bottom line numbers show that in February, the thinking was that 268,000 jobs were added. That was revised to 332,000. That was really good news. The March number at first was thought to be 88,000. That was revised higher to 138,000. That's pretty good as well. So it basically shows March wasn't as bad and that the jobs recovery is underway.

You know, another way to think of this, you look at the past 12 months. Job creation has averaged about 173,000 per month. So it's better than it was. But it also means that this month, meaning April, is below average and March was below average as well. And then you look deeper in the numbers and you start to - to see who is getting hired. And it shows that people are still hurting for work out there. That they're taking any job out there. That the number of people taking part time jobs just to get a job, that number's actually gone up compared to the long term unemployed, which hasn't decreased any. And so it shows that more people, Jake, have been out of work longer and that's a huge issue because the longer you're out of work, the harder it is to get a job. You know, you're skills lapse. Employers wonder what you've been doing. So you're seeing a lot of people still hurting for work and taking part time jobs just to get by.

Jake.

TAPPER: And, of course, as positive as today's jobs numbers were, we need to keep in mind that it needs to be about 125,000, 150,000 jobs created per month just to keep up with population growth.

KOSIK: At least. At least.

TAPPER: And, Diane, let's dive a little bit deeper into the long term unemployment numbers and the fundamentally problematic issues, even though we're, obviously, very excited about the positive job growth. Some economists are calling this a hold steady report, not to bad, not to good. Give us your take on the numbers.

DIANE SWONK, MESIROW FINANCIAL: Well, you know, I have a similar feeling about it. First of all, we know that there was some noise in the data that helped to boost the April data. That the composition of job growth since the start of the recovery has really not matched the composition of the losses we experienced during the great recession. About half the losses in employment during the great recession were in manufacturing, construction, business sector, where wages are much higher. Many of the jobs, three quarters of the jobs we've crated since the start of the recovery have been in the service sector - retail, food services, manual labor, places where we see much lower wages. I saw a lot of jobs in food services, in fact, created this month and a comeback in retail. It's not that we don't want those, but it really underscores that lean towards part time versus full time and people having to compromise because they can't get that full time job, which means they're still stressed.

And I think that's where the real story it is. It is good numbers. We certainly want to celebrate the fact that we're continuing to create jobs out there, and the upward revision to March was just absolutely - or to February was phenomenal to see over 300,000 in a month. We just haven't seen that in ages. That was great. But we need to see that more consistently and we still see a pattern where the economy did slow as it entered March and April and we are hitting a bit of a pause button in the second quarter.

TAPPER: And, Diane, how much do you think that the sequester, these forced spending cuts, how much do you think that played a role in the job numbers going from so great in February to acceptable in March and April?

SWONK: We don't see a huge amount of an effect of the sequester yet, although it may be showing up in parts like manufacturing, defense manufacturing. We couldn't break that out, so it looks like that may have been where some of the weakness was, the strength and manufacturing was in the auto sector, where it has been. It's nothing new there. In construction, we saw non-residential construction fall, while residential construction increased a little bit. We'd like to see those all moving in the same direction.

So we also saw a hint maybe of the sequester in the average hourly work week. It actually declined during the month. And we know that in the private sector, many defense contractors were putting employees on furlough. So we're just beginning to see the effects of the sequester, but it's really hesitant. The federal (INAUDIBLE) in employment outpace those in the state and local sector. They still were not huge, but that is where we're moving (ph). So we're going to see more of that going forward where federal layoffs are going to outpace state and local layoffs. We'd like to see some state and local hires out there. But at the end of the day, particularly teachers are still at risk. But as we move forward, we have to remember the sequester isn't a sky is falling overnight, it's a cascading event.

TAPPER: All right, Alison Kosik and Diane Swonk, thanks so much for joining us. Bottom line seems to be Wall Street marches on. A decent, decent jobs report, but fundamentally a lot of weaknesses remain in the economy and far to many people still looking for work, underemployed or unemployed. Thanks so much for joining us.

Now to the Boston bombings. The mayor's office in Worcester, Massachusetts, tells CNN, the funeral for terrorist suspect Tamerlan Tsarnaev will be held in Worcester, just outside Boston. The hearse you see here is believed to have taken the body to a funeral home yesterday. So now the Massachusetts medical examiner can release the official cause of death. Meanwhile, a law enforcement official tells CNN that the bombs used in the attack were built in that apartment that the dead suspect shared with his wife and child in Cambridge, Massachusetts.

And the captured suspect, Dzhokhar Tsarnaev, has told investigators that the Boston Marathon was not the original target of their of their terrorist plan. The original target for the terrorist attack, Dzhokhar says, was July 4th, Independence Day. That's according to a law enforcement official who was briefed regularly on the investigation.

So, why did the plans change to target the Boston Marathon instead? For more on that, let's bring in Deborah Feyerick in Cambridge, Massachusetts.

Deb, what have we learned about why the July 4th plan was scrapped?

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Well, what's interesting about this, and just to give you a little bit of perspective is you have to go to the source of the original information. This information originally, allegedly came from Dzhokhar Tsarnaev during a 48 hour period when he was questioned by investigators, by law enforcement. He was sedated, he was intubated. So he is the source of that information.

I got off the phone with a number of people this morning and the thing that's kind of bothering everybody is the fact that right now there's no physical evidence that, in fact, they were looking to target July 4th. There are some indications that they had their sights on the Boston Marathon. A tweet dating back to August of 2012, for example, suggesting - mentioning the Boston Marathon and describing it as not a good place to smoke.

So, right now there's a little bit of an absence of physical evidence to suggest that, in fact, they were going to go for July 4th, whether it was something operational as opposed to just aspirational. And another thing when I was talking to people this morning, and that is that, look, they executed this very precisely. There was a certain technical precision. The way they walked, where they stopped, how they were able to coordinate the detonations of the bombs. And more over, how they were able to simply escape without anybody noticing them. So to suggest that they just sort of drove by, looked for the location and decided, hey, what the heck, you know, investigators have to sort of get the evidence to support what Dzhokhar Tsarnaev is saying.

Also, Jake, the one thing we can't ignore are the visuals of this. You look at any terror plot, for example, the attack on the World Trade Center, what was the most important thing? It was the visuals. They picked a place they knew cameras would be trained. So ask yourself about July 4th. If you do it July 4th, do you do it at night? And then can you see the destruction? Or do you target the Boston (INAUDIBLE).

So all of these are questions that investigators and intelligence sources at the highest levels, you know, these are what they're discussing because Dzhokhar Tsarnaev may say it, it doesn't mean there's evidence to support what it is he's claiming.

Jake.

TAPPER: And, Deb, you know what's interesting about that last week, when I was at the Islamic center in Cambridge, the mosque where Dzhokhar was known for causing a ruckus earlier this year and last year, one of the issues that he found himself fighting with other members of the mosque, more moderate members of the mosque, is that a speaker, a preacher at the mosque last November of 2012 was saying that it was fully Islamic for Muslims in America to celebrate the 4th of July and other American holidays, along with Muslim holidays, such as the birth of the Prophet Muhammad, and Tamerlan Tsarnaev objected to that and go into a big fight with him. That's interesting that July 4th is an issue in this.

But I want to ask you another question about new details from your reporting. We've also learned about where the bombs were made. Tell us about that.

FEYERICK: Well, according to a law enforcement official that spoke with Susan Candiotti, the bombs were apparently put together at the Tsarnaev home. It was a - it's a small apartment, about 1,600 square feet. He shared it with his wife, Katherine Russell -- that's one of the reasons she was of such great interest -- also the three year old child. And the brother, Dzhokhar, was also known to frequent that apartment a lot.

I spoke to somebody today, a source, who says that the evidence response team, that's the FBI's evidence teams, that they did discover bomb residue, bomb residue, on the kitchen table, at the kitchen sick and also in the bathroom. The device, Jake, you know, that we know, it was a crude device in terms of the ingredients that were used. The technical precision to actually get it to work is certainly more significant. But that's where they found some of the residue and that's what leads them to believe that that's where they built the bombs, Jake.

TAPPER: That's interesting because, as you know, Deborah, there's that - that cab driver who picked the brothers up - who says - he has told law enforcement that he picked the brothers up the day before the attacks at that train station in Moldin (ph), Massachusetts, and he says that they were carrying the black bags and he thinks the bombs might have been in them. They were very heavy. So it's interesting that they were actually, according to this source, believed to have been manufactured in Cambridge. I wonder what they were doing with those packages, assuming that story is accurate.

Anyway, Deborah Feyerick in Boston, thanks so much for your reporting.

Overseas today, a U.S. military plane has crashed and we do not yet know the fate of the crew. Here's where it happened, near the capital of Kyrgyzstan. American - U.S. military officials say the plane was an air refueler, a KC-135, and it crashed into a mountainous area shortly after takeoff. Again, there's no word yet on the condition of the five person crew that was on board. U.S. forces use an airbase in Kyrgyzstan as a supply hub for the NATO mission in Afghanistan. Often troops fly to Kyrgyzstan before they arrive at Bagram Air Field.

President Obama is wrapping up a trip to Mexico after meeting with President Enrique Pena Nieto. He spoke to college students in Mexico City. Mr. Obama touched on business opportunities, fighting the war on drugs, gun control and comprehensive immigration reform.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is critical that the United States recognize the need to reform our immigration system, because we are a nation of laws, but we're also a nation of immigrants. Like every nation, we have a responsibility to insure that our laws are upheld. But we also know that as a nation of immigrants, the immigration system we have in the United States right now doesn't reflect our values. It separates families when we should be reuniting them.

(END VIDEO CLIP)

TAPPER: Next stop is Costa Rica, where President Obama is expected to meet with the U.S. embassy staff and Costa Rican President Laura Chinchilla.

It's the biggest weekend of the year for the National Rifle Association. The group's annual meeting begins today in Houston, Texas. The NRA's theme this year, "Stand And Fight." More than 70,000 people are expected to attend. Look who is among them and speaking this afternoon, several high profile conservative leaders, former Alaska Governor Sarah Palin, Louisiana Governor Bobby Jindal, Texas Governor Rick Perry and former Pennsylvania Senator Rick Santorum. Observers expect the national meeting to be something of a victory lap since the Senate last month shot down a gun sales background check measure that the NRA was firmly against.

Still ahead, hundreds of firefighters are battling wildfires across California and high winds today will make their job even tougher. We'll take you live to the front lines.

And later on, taking Google glasses for a test drive. Yes, we got our hands on a pair of Google glasses, believe it or not. Stay with us. We'll show you how they work.

(COMMERCIAL BREAK)

TAPPER: Welcome back to CNN NEWSROOM. I'm Jake Tapper in Washington.

There's no relief today for the fire fighting crews putting their lives on the line in California. Several big wildfires are spreading as the winds pick up. One in Ventura County near Los Angeles has burned more than 10,000 acres and threatens 4,000 homes.

Our Stephanie Elam is along the front lines. Stephanie, what's happening right now where you are?

STEPHANIE ELAM, CNN CORRESPONDENT: Jake, we've been out here all night, all morning to watch what's going on. And I can tell you that the fire here called the Springs Fire, we've been watching it burn coming down the side of the mountain here. It has been burning and it's getting a little bit closer in this little area here.

Further down, we saw it burn all the way down to the Pacific Coast Highway where we're standing, jump over the highway and then realize that there's just the Pacific Ocean and nowhere for it to go.

But firefighters are letting this burn because it's not threatening any property. In other parts, they are looking to make sure that no homes are in danger.

One other interesting thing that we've seen happen here is that there are fire trucks coming in here on this part of the PCH, which is closed to traffic right now because of these fires, and they are coming from all over California.

We just saw trucks coming in from San Bernardino. We saw one from Big Bear. They're coming in to help assist with the fires here because it is so big.

And California has a unique system where as fires burn, fire trucks will come in from other regions. And if something were to spring up in their region, fire trucks would come from a different region to cover them.

So they have a way of covering each other so that, where the resources really need to go, they're there, Jake.

TAPPER: Stephanie, tell us about the evacuations in that area.

ELAM: There have been a lot of evacuations because, when this fire started to burn, it was burning very fast, yesterday in particular, and that was because of those winds and just the dry, dry brush. We haven't had enough rain.

So it was threatening about 4,000 homes, about 15 homes actually were damaged, but unbelievably no homes have actually been burned down. A lot of this has been because of a precaution.

And where we've been staying, we've noticed that the hotels have filled up simply because people just don't want to take the chance. They want to get their children and their pets out of the house.

But at the same time, some people are going back to make sure that their homes are OK. Some people are bringing out the sprinklers, bringing out the hoses just to make sure that their homes aren't threatened, Jake.

TAPPER: All right, Stephanie, stay safe.

Meteorologist Chad Myers is tracking the winds and fires for us. Chad, how unusual are these weather conditions this time of year?

CHAD MYERS, AMS METEOROLOGIST: This is not fire season. Fire season doesn't happen until August and September. We should not have these fires.

Let me back you up two years. Over the past two years, f you add up all the rainfall on average, L.A. should have had 29 inches. They've had 14. That's half of what they should have had.

So now these shrub, the chaparral, all this stuff up in the mountains, that should be green from the winter rain that didn't get any winter rain. It's already brown like it's September. So the fire season has already started three months early.

Now, this storm, this fire event here, I mean, I'm talking the winds yesterday 45-, 50-miles-per-hour. It was a big event.

But overall from a scale from one-to-10, this fire's a two compared to what we are going to see this fire season, millions of acres of wildland fires this season because the drought in the West is still in full swing.

Now, today, around this fire, winds died down to about 20. That's good. That's still high, but not 48 like we had yesterday. And at a time around the fire yesterday, Jake, the wind speeds were 40 and the relative humidity was three, three percent. You just can't deal with that.

The firefighters had no chance. They had to let it go. In fact, for a while the winds were so strong they had to take those fixed wing, the planes, they had to take them out of service and only use helicopters.

Now the fixed wings are back in. They're going to get a handle on this. It will still be many more days before it's completely mopped up, though. This is going to take a while.

The good news is you see trees burning; you don't see houses burning with this one.

TAPPER: All right, Chad Myers, thank you so much.

MYERS: You're welcome.

TAPPER: Still ahead, an American sentenced to 15 years hard labor in North Korea. His family is devastated. We'll talk with his sister next.

(COMMERCIAL BREAK)

TAPPER: Welcome back. I'm Jake Tapper in Washington.

The tough talk back and forth between the United States government and North Korea may have cooled off a bit, but the Pentagon is still convinced that North Korea wants a nuclear weapon, one that can reach targets in the United States.

The U.S. military sent its annual report to Congress yesterday describing North Korea's nuclear program as, quote, "ambitious," and the Pentagon does not expect the current North Korean leader to stray far from his father's strategy.

U.S. leaders had hoped Kim Jong-un would be a reformer when he took control of the country in 2011.

U.S. officials are also hoping the nuclear tension will not get in the way of efforts to free an American man who is in North Korean custody. Kenneth Bae was sentenced this week to 15 years in a North Korean labor camp on charges that are still unclear.

His sister spoke to our Anderson Cooper and we also heard from someone who has been in Kenneth Bae's situation, arrested in North Korea and facing a great unknown. Take a listen.

(BEGIN VIDEO CLIP)

TERRI CHUNG, KENNETH BAE'S SISTER: There's a lot of just -- a lot of months of waiting. We're really just at the mercy of North Korea and their legal proceedings and whatever procedures that have or were taking place.

So, yes, there have been just endless months of waiting. ANDERSON COOPER, ANCHOR, "AC360": Might also be that much more difficult when, you know, there have been the recent tensions with North Korea and the kind of bellicose rhetoric from North Korea.

Do you worry that your brother's imprisonment will be used as a bargaining chip, that he becomes sort of a pawn in all this?

CHUNG: Well, you know, we can't not worry about that every time there's a headline about the strange and tense relationship between the two nations.

You know, we just worry about my brother getting caught in between in just the political nature of this process.

We just pray and ask for leaders of both nations to please see him as one man caught in between, and we just ask that he be allowed to come home.

EUNA LEE, JAILED IN NORTH KOREA IN 2009: I remember how I had those feelings, anger and frustration and humiliation that I was going through, and when I heard verdict for 12 years I was just crushed in front of the judges.

And I just can't imagine -- you can just imagine how you're separated from family. My daughter was four, and back then, I couldn't believe that I wasn't going to see her until she turned 16.

And then, I'm sure that it must be really hard for him to be just separated from family and cannot have any communications.

He's alone by himself, all the people who (inaudible) -- probably guards, interrogator.

(END VIDEO CLIP)

TAPPER: The State Department is calling for North Korea to grant Kenneth Bae amnesty and release him immediately.

It's not clear exactly what Bae did to warrant this 15-year hard labor prison sentence.

Still ahead, a law enforcement source says Tamerlan Tsarnaev built bombs in the same apartment he shared with his wife. That's raising even more questions about what his wife knew and when.

She's staying with her parents in Rhode Island, and we'll go there live right after this break.